PSU broadband push: 41 million in loop

BSNL launches Data One, MTNL unveils TriBand.

Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL) today launched their Rs 345 crore broadband initiative, aimed primarily at their combined subscriber base of 41 million.

"It will bring about a new kind of revolution, as people would want to get connected to avail facilities like video-on-demand and video-conferencing. The potential is like the cellular growth in the country," said BSNL Chairman and Managing Director AK Sinha.

The service, which offers a minimum data transfer speed of 256 kbps and is based on asymmetric digital subscriber line (ADSL) technology, will be available at rates starting from Rs 399 a month in MTNL's case and Rs 499 a month for BSNL.

At the minimum speed of 256 kbps, broadband offers connectivity that is 4.5 times faster than dial-up.

At the entry level, the tariffs are comparable to those offered by existing players like Sify and Bharti. But at the higher data transfer speeds that corporates use, MTNL and BSNL tariffs are more competitive.

Launched simultaneously from six different cities, Chennai, Mumbai, Delhi, Kolkata, Hyderabad and Bangalore, the public sector companies plan to aggressively expand their service to other centres.

"The two state-owned units have set a joint target of providing 1.5 million connections by the year-end," Communications and IT Minister Dayanidhi Maran said while launching BSNL's 'Data One' service from Chennai,

India's broadband policy, unveiled last year, envisages 3 million subscribers by the end of 2005, 9 million by end-2007 and 20 million by end-2009. There is already a waiting list for MTNL connections, while BSNL claims to have registered over 50,000 users at launch.

Despite the optimism shown by the companies, low PC penetration could hinder growth. Of the 41million subscribers, only a fourth own PCs and the country is yet the touch the 5-million mark in Internet connections.

Broadband penetration is estimated two per 10,000. Also, over 50 per cent of BSNL's 7 million subscribers are in rural areas, where the demand for high-speed Internet connectivity is low.

Competitors said BSNL and MTNL were yet to tie up their content providers, and high-end services like video-on-demand were far from becoming reality.

Consumers opting for broadband connections will be required to pay Rs 500-1,000 for Customer Premise Equipment consisting of an ADSL modem and a stand-alone or build-in splitter to separate the broadband and telephone connections.

The minimum processor requirement has to be 200 MHz with Windows 98SE (or higher), RAM (memory) 32 MB RAM, Free Disk Space 125MB, SVGA monitor, CD-ROM Drive and Network Interface Card(NIC) with 10/100 Mbps Ethernet port with RJ45 socket. In effect, this means all old computers in the country cannot log on to the new service.

To increase the potential, Maran called for further price reduction by the Telecom Regulatory Authority of India (Trai).

Stating that the price of international bandwidth was the primary obstacle in lowering the cost of providing the service, he added that Trai has been asked to work on reducing the price of international bandwidth.

"It is important to increase the traffic in India to bring down broadband cost. To achieve the aim, we need to develop content in Indian languages," he said.

The Department of Information Technology would give free computers to schools, said Maran. He said an attempt was being made to facilitate the introduction of computers that cost less than Rs 10,000.

At the inauguration, Sinha said BSNL's aim was to provide one million connections across 198 cities this year.